Consoles are hardly at fault. Even without consoles, games today would not look better than BF3/Crysis2. Skyrim looks just okay compared to these games, but even then, I don't know if it would look any better being PC-only: Bethesda was just more focused on gameplay than graphics, and it seems like it was intentionally designed to run well on lower grade hardware as RPG players typically don't have as robust machines as FPS players.

Like the man said, the hardware is stalling as a result of the software stalling. With no games coming out requiring better hardware, better hardware isn't coming out. Rather than simply blowing previous SKUs out of the water, everything nvidia has released for the past three-five years has been an incremental improvement at best.

Newer hardware is showing considerable improvements, but most of them aren't coming in gaming performance. They're coming in general computing performance as the GPU vendors are gearing their architecture to serve as additional processing units, which also is impeding improvements in gaming performance.

Simply put, they're responding to what the market demands are. The growth sectors are in GPGPU technologies, so that's what they're catering to.